Nasdaq falls 2.6%, Dow 542 points as oil tops $85

Verizon and AT&T in focus as 5G rollout looms

Heavy selling hit U.S. stocks on Tuesday as oil and bond yields moved higher. 

The Dow Jones Industrial Average fell 542 points or 1.5%, before recovering from a 600+point deficit, while the S&P 500 and Nasdaq Composite slid 2.6% and 1.8%, respectively in a choppy session. 

The 10-Year Treasury yield rose to 1.87%, adding pressure to equities.  

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 33212.96 +575.77 +1.76%
SP500 S&P 500 4158.24 +100.40 +2.47%
I:COMP NASDAQ COMPOSITE INDEX 12131.131075 +390.48 +3.33%

Oil closed above $85 per barrel, an 8-year-high following an attack on an oil facility in the capital of the United Arab Emirates that killed at least three people.

Ticker Security Last Change Change %
USO UNITED STATES OIL FUND L.P. 85.46 +0.87 +1.03%

In deal news, Microsoft announced plans to buy Activision in a combo valued at $68.7 billion giving the software giant a leg-up in the gaming world with titles including ‘Call of Duty’ and ‘Candy Crush’, the companies announced Tuesday. 

The deal also made Activision CEO Bobby Kotick over $70 million intra-day as the company's largest single shareholders. 

ACTIVISION CEO BOBBY KOTICK IS EVEN RICHER AFTER MICROSOFT DEAL

Ticker Security Last Change Change %
MSFT MICROSOFT CORP. 273.24 +7.34 +2.76%
ATVI ACTIVISION BLIZZARD INC. 78.20 +0.21 +0.27%

Electronic Arts, Take-Two and Zenga rose in a down market as traders weighed the possibility of more M&A. 

Ticker Security Last Change Change %
EA ELECTRONIC ARTS INC. 138.53 -0.15 -0.11%
TTWO TAKE-TWO INTERACTIVE SOFTWARE INC. 125.78 +2.50 +2.03%
ZNGA n.a. n.a. n.a. n.a.

In earnings, Goldman Sachs shares fell after fourth-quarter profits fell to $10.81 per share, missing analyst estimates of $11.76 tracked by Refinitiv and below the same period a year ago on weaker results from its trading division. JPMorgan shares fell in sympathy. 

Ticker Security Last Change Change %
GS THE GOLDMAN SACHS GROUP INC. 328.58 +4.95 +1.53%
JPM JPMORGAN CHASE & CO. 131.27 +1.83 +1.41%
SCHW THE CHARLES SCHWAB CORP. 70.54 +1.65 +2.40%
BAC BANK OF AMERICA CORP. 37.02 +0.32 +0.87%

Charles Schwab also reported results that fell below analysts' expectations with profits of $0.76 per share vs. $0.88 estimate, while revenue was $4.71 billion falling short of the $4.79 billion estimate. Bank of America will report results on Wednesday. 

Unilever shares slipped after Fitch Ratings warned a downgrade could come, citing the company's strategy which focuses on healthcare which includes its planned acquisition of GlaxoSmithKline's consumer unit. 

Ticker Security Last Change Change %
UL UNILEVER PLC 43.98 +0.16 +0.37%
GSK GSK PLC 44.06 -0.36 -0.81%

Separately, 23andMe extended a joint immuno-oncology program. 

Ticker Security Last Change Change %
ME 23ANDME HOLDING CO 2.86 -0.03 -1.04%

Meanwhile, Interactive Brokers and J.B. Hunt Transport Services will report after the bell. 

Ticker Security Last Change Change %
IBKR INTERACTIVE BROKERS GROUP INC. 61.19 +1.70 +2.86%
JBHT J.B. HUNT TRANSPORT SERVICES INC. 174.86 +1.68 +0.97%

Keep an eye on telecom stocks, including Verizon and AT&T, with the rollout of 5G Wednesday. 

Ticker Security Last Change Change %
VZ VERIZON COMMUNICATIONS INC. 51.40 +0.41 +0.80%
T AT&T INC. 21.29 -0.03 -0.14%

As for economic data, the National Association of Home Builders' housing market index slipped one point to 83. 

In Asia, the Bank of Japan wrapped up a two-day policy meeting with no major changes. Its benchmark interest rate remains at a longstanding minus 0.1%.

Price increases in Japan have been less pronounced than they are in the U.S. and some other nations, though the central bank raised its inflation forecast for the fiscal year that begins in April to 1.1% from a previous estimate of 0.9%.

Japan’s benchmark Nikkei 225 fell 0.3% to 28,257.25. Australia’s S&P/ASX 200 lost 0.1% to 7,408.80. South Korea’s Kospi dropped 0.9% to 2,864.24. Hong Kong’s Hang Seng slipped 0.4% to 24,112.78, while the Shanghai Composite rose 0.8% to 3,569.91.

The Associated Press contributed to this report.